Types of Regionalization Strategies (Business Essay Sample)

Check Out Our Types of Regionalization Strategies Essay

First Solar Company was established in 1984 as Solar Cells Inc. by Harold McMaster. At that time the Company used glass as a substrate but still carried out research with a new thin film material, Cadmium Telluride (CdTe). The break came in 1993 when it was now able to producing CdTe in commercial basis and in 1998; the Company’s solar energy production reached 20 megawatts. In 1999, Solar Cells Inc. was bought by True North Partners and the Company was renamed, First Solar, LLC (Stanford Graduate School of Business, 2010).

In terms of manufacturing, First Solar Inc. had deployed the Portfolio strategy seeing that it had taken the initiative of expanding its manufacturing plants to Asia, North America and Europe at large. The Company established the plants in regions which were outside its locality but were still managed by the parent organization situated in Arizona. This strategy is perceived to have catapulted the growth in these foreign regions as well as increasing its economic cycle’s altogether. At this point in time, I believe in the Company going ahead and apply the Platform strategy in order to increase the chances of continuing operations for the next ten years. The move to apply this strategy, will aid in reducing the level of competition it faces from the start-up companies. First Solar Inc. should cease from relying on the outdated policies which were put long time before and embrace positively the changes experienced in the industry at large in terms of competition. With platform strategy, the company is expected to minimize the level of production of the energy it produces in its home base and instead concentrate on customizing its entire production to fit the list of clients it possesses. It is expected that the company will achieve its initial objective by focusing more on the vertical expansion of its market. The move made by China to lessening the commitment it had placed in leadership should be a deterring factor for which First Solar Inc. will use to minimize the level of production since extensive parts of the existing markets have been taken over by the emerging companies in the industry. I believe that it was wise for First Solar Inc. to purchase both OptiSolar and Turner Renewable Energy since it catalyzed its desire for increasing its profits margin in the home base market as well as aided the increase in the level of vertical penetration of the market.

In order to curb the technological risk thus guaranteeing its future operations, First Solar Inc should embrace the application of portfolio methodology in that, it will assist in the shifting of its level of confidence in CdTe production to an advanced technology. The fact that the Company depends on CdTe for its entire production, minimizes the survival chances of its operations. This is because most of the start up companies have invested large amounts of money in R&D with the intention of innovating materials which will be cost effective hence the increase in there level of returns. When First Solar Company embraces portfolio mode of strategy, it means that it will have to develop and nurture external operations with the purpose of reducing the aforementioned risk. Although it will take more time to implement the strategy, portfolio mode of approach will increase the operational life of the company to a period of more than ten years (Ghemawat, 2010).

With the insurgence of 2008 financial crisis, the Company faced a major risk in its revenue allocation since it possesses a substantial portion of the system business (Ghemawat, 2010). In case the finance project is surged and made vulnerable its implications will be reflected in the level of the company’s profits or rather revenue. This will in turn expose it to an irreparable position and thus risk closing its production within a period of the coming ten years. Whether the Company decides to ignore this fact or not the level of this risk should be analyzed for the purpose of maintaining its survival ability in the competitive industry. In this case the Company should choose to deploy the hub approach so as to make advancements in the research and development in the local market given the fact that credit markets and tax equity markets are never to be relied upon. With the application of hub mode of strategy, the Company is placed at a better position to accelerate the growth of the market in foreign regions by provision of shared resources within countries falling inside the aforementioned area.

All in all, I believe that for First Solar Inc. to penetrate the market further and thereby guarantee its operation in the next ten years, then it is expected that it combines almost the entire set of strategies. The fact that the Company is currently operating at a profit should not deter it from making advancements in the different sectors within the industry. This is in fact portrayed when the Company attracted the services of the best experts available in the market to undertake its R&D project.